The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.

How to make the most of cashback credit cards

Cashback credit cards — also known as 'reward' credit cards — offer a way to earn money back on your normal, everyday spending.

So, what cashback cards are available right now? And how can you make the most of these cards? Let's take a look...

What is a cashback credit card, and how do they work?

A cashback credit card is a specialist type of credit card. They're offered by a handful of credit card providers, with some offering cardholders up to 5% cashback.

Use a cashback credit card for your normal, everyday spending and you'll earn money back (or rewards) every time you tap your card at the till. For example, on a card offering 5% cashback, you'll earn £5 for every £100 you spend.

It's worth knowing that some cashback or reward cards come with introductory bonuses. These can give new cardholders the chance to earn a boosted rate of cashback for a limited period of time. Some cards may also offer an incentive for hitting a defined trigger spend.

Is a cashback credit card right for me?

The big benefit of having a cashback credit card is that you can be rewarded for your normal day-to-day spending. In other words, you don't have to change your spending habits or be a big-spender to benefit from these cards. This means if you're currently using a bog-standard debit card for all of your regular purchases, you may wish to consider joining the cashback card bandwagon.

Despite the clear benefits of using a cashback credit card, however, these cards aren't for everyone. If any of the following apply to you, then it's probably best to stay away from using a cashback credit card.

1. You have existing credit card debts. If you have existing debt on a credit card then you should probably forget about getting a cashback credit card for now. That's because while cashback credit cards can be a great way to earn money back on normal spending, if you're paying a typical rate of interest on credit card debt, then this will almost certainly dwarf any cashback gains.

So, if you're in this position, consider applying for a 0% purchase, or balance transfer credit card instead.

2. You've a poor credit score. Cashback credit cards should also be avoided by those with poor credit scores. That's because in order to be accepted for a cashback credit card, you'll need to have a decent-ish credit history. However, if your creditworthiness is less than stellar, take heart from the fact that there are several ways to improve your credit score.

3. You're at risk of overspending. It's really important to avoid spending more than you usually would on a cashback credit card. Even if you're offered a card with a generous rate of cashback, overpaying for goods or making large, extravagant purchases for the sake of earning a few quid isn't sensible.

4. You'd struggle to repay what you owe each month. Cashback credit cards typically don't come with a 0% period. This means if you don't clear your balance by the end of each month, you're likely to face eye-watering rates of interest. Put simply, if you aren't 100% confident you'd clear your balance in full at the end of every single month then it's worth giving cashback cards a swerve.

5. You've an important application for credit around the corner. Every time you apply for a credit card a mark will be made on your credit file. Unless you make lots of applications for credit in a short space of time, this is usually no big deal. However, if you're planning an important application for credit in the near future, such as a mortgage or a personal loan, then you may wish to hold off applying for a cashback credit card. If you don't, your cashback credit card application could scupper your chances of being accepted for a competitive mortgage or loan.

What cashback credit cards are available right now?

There are a host of cards that'll pay you cashback on your normal spending. Let's take a look at some of the most generous cards out there...

The Amex Platinum Cashback Everyday pays a whopping 5% cashback for the first three months, though the maximum cashback you can earn within this intro period is capped at £100. After the initial three months are up you'll earn 0.5% cashback on spends up to £10,000, and 1% on anything above. However, it's worth noting that you won't earn any cashback at all unless you spend at least £3,000 per year on the card. The representative APR is 29.4%, so ensure you fully repay your balance at the end of each month to avoid having to pay interest.

If the Amex Everyday isn't for you then take a look at the Amex Preferred Rewards Gold. It doesn't pay cashback as such, but gives 20,000 Amex Membership Reward points if you spend £3,000 on the card in the first three months. You also earn one point for every £1 you spend.

20,000 Amex points can be converted to a number of juicy rewards, including £150 worth of Nectar points or 20,000 Avios points. A word of warning though... this card comes with a hefty £160 annual fee — though it's waived in year 1. If you don't want to pay a fee, ensure you cancel the card within your first year. The representative APR on this card, including the fee, is 73.3%.

Another card to consider is the Sainsbury's Bank Mastercard . It offers 8,000 bonus Nectar points if you spend £400 in either Sainsbury's or Argos (they're part of the same group). This is worth around £40 in vouchers. You also earn one point for every £2 you spend at Sainsbury's or Argos, and one point per £5 spent elsewhere. The representative APR on this card is 22.9%.

In addition to the above, it's also worth taking a look at the Chase current account. As its name suggests, it's a debit, not a credit card. Chase's account pays unlimited 1% cashback on almost all spends for 12 months.

However, if you like the look at this card you may want to act sooner rather than later as the cashback element will soon become less generous. Anyone applying from 1 May onwards will only be able to earn a maximum of £15 per month in cashback. Plus, they'll also be a requirement to pay in at least £500 into the account each month to earn cashback. For more current accounts offering perks, take a look at our best bank accounts guide.

For more credit cards paying cashback or rewards, take a look at our cashback credit cards guide.

How can you make the most of cashback credit cards?

If you've decided a cashback credit card is right for you, here are 5 tips that are worth bearing in mind.

1. Use your cashback credit card as your main card. Don't fall into the trap of reserving your cashback card just for those big purchases. Instead, spend on your cashback credit card as often as you can in order to max the benefit, even if only spending a pound or two!

2. Ensure you sign up for the right card for you. It may sound obvious, but signing up for a cashback card that pays you in points for a loyalty scheme you don't use is probably a waste of time. Likewise, signing up for a cashback card that requires you to spend a set amount per year to earn any cashback at all could be a risky move if you're a small spender.

3. Interested in an Amex card? Understand the 'two year' rule. Up until a few years ago, it used to be common for experienced cashback card users to 'churn' Amex cards to earn multiple introductory bonuses in quick succession. However, Amex has since introduced a rule that prohibits anyone who has held one of its personal cards within the past 2 years from earning another intro bonus. So, if you already have an Amex card, you may wish to cancel it, switch to a non-Amex card for two years, before re-applying for a new card. That's because if you do this, you'll be able to qualify for another introductory bonus in the future.

4. Consider a non-Amex card. While on the subject of Amex cards, it's worth knowing that not all retailers accept American Express. As a result, it can often be a good idea to hold a non-Amex cashback card so you can still earn cashback at retailers where Amex isn't accepted.

5. Look to boost any reward points you earn. If you end up with a cashback credit card that pays you in points, such as Nectar points, take a look at ways you can max the value of them. For example, it's possible to boost the value of your Nectar points by using them at Cafe Nero or the Sky Store.

In terms of Amex Membership Reward points, if you like to travel, then it's often a good idea to transfer your points to Avios and use them for flight bookings or upgrades, as this can provide good value. And on this note, if you're interested in using Avios points for travel rewards, take a look at our article that explains how you can use specialist airline credit cards to bag yourself a 'free' flight on BA or Virgin Atlantic.


The guidance on this site is based on our own analysis and is meant to help you identify options and narrow down your choices. We do not advise or tell you which product to buy; undertake your own due diligence before entering into any agreement. Read our full disclosure here.